Transcript for Obama on Sequester Cuts: 'This Is Not a Win for Anybody'
This is a special -- -- from ABC news now. And good morning everyone I'm down Cutler in New York where the government is hours away for starting the process of slashing 85 billion dollars in spending it is known as the sequester. And barring any major breakthrough at midnight tonight federal agencies will begin making cuts all and a last ditch effort President Obama just met with congressional leaders. Including house speaker John Boehner Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi along with senate majority leader. Harry Reid no breakthrough was expected news house speaker John Boehner in fact left the White House. Within the hour saying this. Of people over Washington have suspended for up. And while there are smarter ways to cut spending them. The process of were about to -- -- The -- shouldn't have to pass a third -- before the senate doesn't it. The house -- played out Wendell Ford as a restaurant I would hope both the senate. -- -- But let's make it clear just the present -- -- has capsized on January 1. Discussion about revenue. Five -- evolved. It's about to pick involve spending abroad Washington. I didn't play out 3000 according -- -- contributed resolution next week to fund the government past mark myself. I'm hopeful that we won't have to. What the threat of a government shutdown. While we're doing what the question came back of the house black -- We'll follow suit thanks for. And -- the comment that was made just a short time ago now we are also waiting on the president himself will be addressing members of the press at this morning's White House briefing. We'll be monitoring that he steps up to the -- right now want to bring an ABC's political director Rick Klein. Rick -- is the feelings in the White House and on the hill this morning it looks obviously contentious for lack of a better word. -- -- -- on contentious there is just absolute outrage that disgust with their own inability to act right now this was always meant to be a policy that would never take effect and now it's actually happening. All right so the fact the matter is when -- go to the president now at the White House. -- way forward in light of the severe budget cuts that starts take effect. Today. I told them these cuts will hurt our economy. -- cost us jobs. And to set it right both sides need to be willing to compromise. -- the good news is the American people are strong and the resort. They fought hard to recover from the worst economic crisis. Since the great depression and we will get through this as well. Even -- these cuts in place votes all across this country will work hard to make sure that. We keep the recovery -- But Washington sure is making these. -- time -- our businesses have finally begun to get some traction. Hiring new workers bringing jobs back to America. We should be making a series of -- arbitrary cuts to things that businesses depend. And workers to cut like education. And research. And infrastructure and defense. It's unnecessary. At a time when too many Americans are still looking for work. It's inexcusable. Now. What's important understanding is that not everyone will feel the pain of these cuts right away. The pain -- will be real. -- beginning this week many middle class families will have their lives disrupted. In significant ways. Businesses that work with the military like the Virginia ship -- -- I visit on Tuesday. May -- -- lay folks off. Communities near military bases will take a serious blow. Hundreds of thousands of Americans who serve their country. Border Patrol agents FBI agents. Civilians who work at the Pentagon. All -- suffer. Significant pay cuts and furloughs. All of this will cause a ripple effect throughout our problem. Layoffs and pay cuts means that people have less money in the pockets and that means -- available it's my -- at local businesses. That means more profits that means fewer hires. The longer these cuts remain in place the greater the damage to our economy. A slow -- that will intensify -- each passing day. So economists are estimating that. As a consequence of the sequester that we could see growth cut by over one half of 1%. -- will cost about 750000. Jobs at a time when we should be growing jobs more quickly. So every time that we get a piece of economic news. Over the next month next two months next six months. As long as this -- employees will know that bad economic news could have been better. If congress have not fail to act. And let's be clear none of this is necessary. It's happening because a choice that Republicans in congress. Have made. -- allow these cuts to happen. Because they refused to budge on closing. A single. Wasteful loophole to help reduce the deficit. As recently as yesterday they decided to protect special interest tax breaks for the well off and well connected. And they think -- that's apparently more important than protecting our military for middle class families from the pain of these cuts. I do believe. That we can't and must replace these cuts were -- more balanced approach that's something from every part. Smart spending cuts. Entitlement reform. Tax reform that makes the tax code more fair for families and businesses without raising tax rates. Also that we can responsibly lower the deficit without laying off workers are forcing parents to scramble for child care. -- -- financial aid for college students. I don't think that's too much to ask I don't think that is partisan. It's the kind of approach that I proposed for two years it's what I ran on last year. The majority -- the American people agree with me and this approach. Including by the way a majority of Republicans. We just need Republicans in congress to catch up with their own party and the country -- and if they did so we could make a lot of progress. I do know that there are Republicans in congress who privately at least say that they would rather close tax loopholes that let these cuts go through. I noted there Democrats who'd rather do Smart entitlement reform then let these cuts go through. So there is a caucus of common sense up on Capitol Hill it's just it's a silent group right now and we want. To make sure that their forces start getting hurt in the coming days in the coming weeks and to keep up keep on reaching out to them. Both individually and as as groups of senators or for members of the house and say to them what's -- I just for a month -- two but for years to come. Because the greatest nation on earth does not conduct its business. In a month to month increments. Or by careening from crisis to crisis and America's got a lot more work to do. In the meantime we can't let. Political gridlock around the budget stand in the way of other areas where we can make progress. I was pleased to see that the house passed the violence against women act yesterday. That is a big win. Four. Not just women but for families and for the American people. It's a -- that's gonna save lives and help more Americans live free from fear it's something. That we've been pushing -- for a long time I was glad to see that done. And it's an example of how we can still get. Some important bipartisan legislation through this congress even though there are still these fiscal arguments taking place. I think there are other areas where we can make progress. Even -- this restaurant resolved. I will continue to push for these initiatives -- keep pushing for high quality preschool for every family that wants. You know keep pushing to make sure that we raise the minimum wage so that it's one that families can live off. Gonna keep on pushing for immigration reform and reform our voting system and improvements on our transportation sector. And I'm gonna keep pushing for sensible gun reforms. Because I still think they deserve a vote. This is -- -- of the American people voted for. These are America's priorities. They're too important to go unaddressed. And I'm gonna keep pushing to make sure that we see them through so bad and it takes your questions on the start with -- -- He waved off -- Well. Look. We -- cut. 2.5 trillion dollars America. -- we need to cut four trillion dollars. Which for Israel to come up route and other petroleum -- The vast majority of economists agree that the problem when it comes to deficits. Is not discretionary spending is not that we're spending too much money on education. It's not that we're spending too much money on job training. Or that we're spending too much. Money rebuilding our roads our bridges were not. The problem we have is a long term problem. In terms. Or health care costs. And programs like Medicare. And what I've -- Very specifically. Very detailed. Is that I'm prepared to take on the problem word exists on entitlements. And do some things -- my own party really doesn't like. If it's part of a broader package. Of sensible deficit reduction. So the deal that I put forward. Over the last two years the deal that I put forward. As recently as December of is still on the table I am prepared to do hard things. And to push my Democrat. Democratic friends to do hard things but what I can't do. Is ask -- middle class families. -- seniors -- students. To bear the entire burden of deficit reduction when we know we've got a bunch of tax loopholes. Are -- the while often well connected are contributing to growth are contributing to our economy. It's not fair it's not right the American people don't think it's fair war and don't think it's right so. You know I recognize that speaker Boehner is. Challenges. In his caucus. I recognize that it's very hard for Republican leaders to. Be perceived as making concessions to me. You know sometimes -- reflect you know is there something else I could do to make these guys. Not talk about leaders now but maybe some other house -- -- caucus members. Not. -- horns on -- And and I genuinely believe there is an opportunity for us to cooperate. But what doesn't make sense and the only thing that we've seen from Republicans so far in terms of proposals is to replace this Barbara -- Paris. Where is even worse are -- cuts. That's not gonna help the economy. For outside help -- -- slugger create jobs. And news. A number of economists noted ironically it doesn't even. Reduce our deficit in the smartest where possible -- the fastest way possible so. It in terms of going forward. My hope is that. After -- some reflection. As members of congress start hearing from constituents who were being negatively impacted. As we start. Seeing. The impact of -- the sequester is having. That they stood back and say -- Is there a way for us to move forward. -- A package of entitlement reforms. Tax reform. Not raising tax rates. I gotta find programs that don't work. Coming up where a plan that's comprehensive. And that makes sense and it may take a couple of weeks of may take a couple of months but I'm just gonna keep on pushing on -- and my view is is that ultimately. Common sense prevails. But what is true right now is that. The other Republicans have made -- choice. Maintaining. An ironclad rule that we will not accept an extra dimes worth of revenue. Makes it very difficult for us to get. Indeed larger comprehensive deal and that's Schwartz -- -- they're saying that it's more important to preserve these tax loopholes. Than it is to prevent these arbitrary cuts. And -- what what's interesting here is speaker -- just a couple months ago identified. These. Tax loopholes and tax breaks and said we should close generate revenue. So it's not as if it's not possible to do. They themselves have suggested that it's possible to -- And if they believe that in fact. These tax loopholes in these these tax breaks for the well off from the -- connected architecture curbing the growth. Are good for our economy are particularly fair and can raise revenue. Why don't we get started what we do that. It may be that because of the politics within the Republican Party they can't do it right back. I understand it my hope is that. They can do it later and and I just want to repeat -- -- the it's very important understand. It's not as if Democrats are being asked to do anything either to compromise. Mean there are members. My partner who violently disagree with the notion that we should do anything. Law and Medicare. And I'm going groups -- to them I disagree with because that want to preserve Medicare for the long haul. And we're gonna have some talk politics within my party. To get this stuff this is not a situation where I'm only asking for concessions from Republicans and asking nothing. From Democrats I'm saying that everybody's gonna have to do something. And the one. Key to this whole thing it is trying to make sure we keep in mind who were here for. We are not here for ourselves we're not here for our party's. We're not here to advance. Our electoral prospects. We're here for American families who have been given better pretty good over the last four years are just starting to see economy improved. Businesses are just start to see some confidence. Coming back. And you know this is not a win for anybody. That this is a loss for the American people. And and then again if we step back -- -- remind ourselves what is were supposed to be doing here. -- hopefully common sensible him. Usually give me an example of what what I might do it. Floral -- the question the what what what I'm what I'm suggesting is I've -- court ordered plan. That calls for serious spending cuts serious entitlement reforms. Goes right at the problem. That is the heart of our long term deficit problem. I've offered. Negotiations around that kind of balanced approach. And so far we've -- rebuffed because. What speaker Boehner and the Republicans have said is we cannot do any revenue we can do a dime's worth the -- So what more -- -- progression to. -- -- -- -- -- -- be good because the people have a suggestion I'm happy to. Businesses my room full of Smart. -- a roomful of Smartphones sold all right let go far. Mr. President Tom the next focal point seems to be the continuing resolution that part that's underneath. The month and expires within the month would you sign -- CR that continues that's a question mark continues to -- -- And in a related point how do you truly reached the limits of your persuasive powers or any of the leverage you have. Finish the Republicans that felt that this that this isn't going to go. Well I I'd like to think I've still got some persuasive power left -- me check. No I look. The issue is not -- persuasive power -- the American people agree with my approach they agree that we should every balanced approach to deficit reduction. The question is can the American people help persuade bear. Members of congress to do the right thing. And you know -- a lot of confidence but over time if the American people express. Their displeasure about how substance work and that eventually. Congress response sometimes there's little gap. Between. What they murdered people think and what congress thinks but eventually congress catches -- Would respect to. The budget and keeping government opened. Tried -- for our viewing audience to make sure that they we're not talking and Washington gobbledygook. What's called a continuing resolution. Which is essentially just an extension of last year's budget into this year's budget. -- to make sure that basic government functions. Continue. I think it's the right thing to do to make sure that we don't have -- government shut. And that's preventable we have -- budget control act right we agreed to a certain amount of money that was going to be spent each year. And certain funding levels for our military our education system and so forth. If we stick to that deal. And I -- Be supportive of us sticking to that -- deal that I made. The sequester. -- additional cuts on top of that and by law until congress. Texas sequester -- way we'd have to abide by those additional cuts but there's no reason why we should have another crisis by. Shutting the government down in addition -- of these arbitrary spending cuts just. -- -- -- he's become dormant even at lower levels to sequester even if you -- first. They're American I never want to make muscle her percent clear -- you guys. But. I think it's fair to say that I made a deal. For a certain budget. Certain numbers. There's no reason why that deal needs to be reopened it was a deal that speaker -- made as well and all. The leadership made and if if the the bill that -- on my desk is reflective. The commitments that we previously made. Ben obviously outside actors -- make sure that we keep on doing what we need do for the American people. Doesn't. Present to your question what could she do herself couldn't you just happened down here. Refused to let them keep the rhythm it's. Yeah you know be. I mean Jessica -- I am not. A dictator I'm the president so ultimately you. Mitch McConnell or John -- We need to go to catch a plane. I can't have Secret Service blocked the doorway right so afraid of I I understand and and and I and I know that this has been some of the conventional wisdom that's been floating around Washington that. Somehow. Even though. Most people agree that I'm being reasonable. That most people agree on presenting a fair deal. The fact that they don't take it means that I should somehow. You know. Do it -- -- mind. Meld with these folks and convince them. To do what's right well you know their elected. We have a constitutional system of government. The speaker of the house and the leader of the senate and all those folks have responsibilities. What I can do -- I can make the best possible case for why we need to do the right thing. I can speak to the American people about the consequences. Of the decisions that congress maker of the lack of decisions. Making by congress. But ultimately it's a choice they make. And the this idea that somehow there's secret formula or secret sauce to get speaker Boehner. Or Mitch McConnell to -- say you know what Mr. President your right. We should close some -- -- taxables for the role often well connected in exchange for. Some serious entitlement reform and spending cuts programs we don't need. -- -- I think if if there was a secret way to do that I would have tried it I would have done it. What I can do is I can make the best possible argument. And I can offer concessions. And I can offer compromise. I can negotiate. I can make sure that my party is willing to compromise and has not. Being ideological -- thinking about these just in terms of political terms. And I think I've done that -- -- I will continue to do but what I can't do. Is force. Congress. To do the right thing. The American people may have the capacity to do that and in the absence of a decision on the part of the speaker of the house and others to. Put. Middle class families ahead of whatever political imperatives. He might have right now. Were gonna have these these cuts in place. But again I'm I'm hopeful about human nature I think that over time people do the right thing and I will keep on. Reaching out and seeing if there -- other formulas or other. Ways to trigger this thing and a place of -- so we get a better result. People like mayor -- there is no critic of yours generally endorsed you. Who argues that there -- some political posturing and -- claims that they're going to be big layoffs and a lot of people out of work. And think that the effects of this spending cuts are being overseen -- -- We'll just go look -- all this give me an example. The Department of Defense right now has to figure out. How. The children -- military families. Are going to. Continue. We of their schooling. Over the next several months because. Teachers. These are bases are typically civilians. They are therefore subject to -- which means that they -- Be able to teach. One day a week. Now. I expect there will be able to manage around it. But it if I'm if common. A man or woman or -- in uniform in Afghanistan right now. The notion that my spouse back home is having to worry about whether or not. Our kids are getting the best education possible the notion that my school for my children on an army base might be disrupted. Because congress didn't act. That's an impact. -- Mayor Bloomberg and others may not feel that impact I suspect they won't. But that family well. The over the Border Patrol agents who are out there in the hot sun. Do and what congress says they're supposed to be doing. Finding out -- -- -- again at 10% pay cut. And having to go home and explain that to their families. I don't think they feel like this is an exaggerated impact. So the idea I guess it depends on where you set. Now what is actually truism that not everybody's gonna feel. Better by is gonna feel it all wants. What is true is that. The accumulation of those stories all across this country. Folks who suddenly -- you know might might have been working all their lives. -- to get an education just so that they can get that job and get out of welfare and they -- -- -- head start now some women have start slot has gone. And they're trying to figure out how might -- to keep my job. Because I can't afford child care for my care. Groups. Some of the suppliers for -- ship builders. Down in Virginia. Where you've got some she suppliers were small businesses visit all they do and they may shut down. Those companies and and their employees are going to be laid off. The accumulation of all those stories of impact is gonna make our economy weaker. It's gonna mean less growth to gonna mean hundreds of thousands of jobs lost that is -- That's not a where I'm making that up that's not scare tactic that's a fact. Started tomorrow. Everybody here all the folks were cleaning the floors. At the capitol. Now the congress' -- somebody's going to be. Vacuuming and in -- those floors and thrown out the garbage they're gonna have Westpac. The jet orders the security guards. And -- got -- Erica. And they got to figure out how to manage that's real. So -- -- I would be very clear. It is absolutely true that this is not going to precipitate the kind of crisis we talked about. What Americans defaulting and and some problems around the Betsy. I don't anticipate. A huge financial crisis. But people are going to be her. The economy will not grow as quickly as it would -- Unemployment. Will not go down. As quickly as it what it. In their lives behind it. And that's real and it's not necessary that's the problem. Certainly president -- -- -- Newspapers and Mr. President your administration weighed in yesterday on the problems. Look like you must be. I just wondered if you could talk a little bit about your deliberations and how you're thinking evolved on that -- -- conversations that were important to you wouldn't. As are -- here knows. Last year. Upon. A long period a reflection. I concluded that. We cannot. Discriminate. Against same sex couples when it comes -- marriage. But the basic principle that America is founded -- The idea that were all created equal. Applies to. Everybody. Regardless of sexual orientation as well as race or gender. Or religion or ethnicity. And -- You know I think that fit the same revolution and I've gone through is an evolution of the country as a whole is gone through and I think it is a profoundly positive. So that when. The Supreme Court essentially call the question by taking this case about California's law. I didn't feel like that was something that this administration could -- I felt it was important for us to articulate. -- I believe. And what this administration stands and although I do think that. We're seeing on a state by state basis. Progress being made more and more states recognizing. Same sex couples and giving them the opportunity -- And maintain. -- benefits of marriage that. -- -- sexual couples -- When the Supreme Court asks. Do you think that. The California law which. Doesn't provide any rationale for discriminate against same sex couples other than just. The notion that well -- same sex couples. Just record asks me or my -- -- general or solicitor general do we think that means. Constitutional Muster. I felt it was important for us to answer that question honestly and the answer is not. And given the fact that you do about this about gay marriage and wondered if he thought about just. When she made the decision to weigh in -- -- just argue that. Marriage is -- right. Our people. Well that's an argument that I've made personally. The solicitor general. In his institutional -- -- before the Supreme Court is obliged to answer the specific question before them. And the specific question. Presented before the court right now is whether prop eight. And the California law is unconstitutional what we've done is we've put -- a basic principle which is. Which applies to all equal protection cases whenever. A particular group is being discriminated against the court asked the question. What's the rationale for this you better be a good reason. And if you don't have a good reason we're gonna strike about and what we've said is that. Same sex couples. Or a group a class. That deserves heightened scrutiny that Supreme Court needs to ask. The state wives -- and -- the state doesn't have a good reason it should be struck down that's the core principle as applied to this case. Now what you know. The court made -- -- bit if it doesn't apply in this case probably can apply in any case there there's no good reason for that's if I were on the court. That -- -- view that I perform. But but I'm not a judge on the president so. The basic principle over its. Let's treat everybody fairly. What street -- evil and and and I think that the brief that's been presented. Accurately reflects our issues. Com. -- -- You -- a few minutes ago when you've said repeatedly that the country has to stop careening from crisis to crisis so if you crises behind us and crises ahead of us taking a step back from this specific debate over the sequester. How -- the leader of this country do you plan to stop the country from careening from crisis to crisis. Well a couple of things number one. Is. To make sure that we keep making progress where we can. On things there are reports middle class Americans and those were fighting in the middle -- so. If you set aside a budget fights for us -- -- we've been able to -- now the violence against women's act now. The conversations that are taking place on a bipartisan basis around immigration. Are moving forward. We've seen great interest in a bipartisan fashion. Around how we can continue to improve our education system including around early childhood education. There -- -- constructive discussions around how do we reduce gun violence and -- you know what I'm gonna keep on trying to do is to make sure that. We push. On those things that are important. Families. And we won't get everything done all wants what we can get a lot done so that's point number one with the respect to the budget. What I've done is to make a case to the American people that. We have to make sure that we have a balanced approach deficit reduction but. That deficit reduction alone is not an economic falls. And and part of the challenge that we've had here is that. Not only. Congress. I think Washington generally. Spends all its time talking about deficits. And doesn't spend a lot of time talking about how to would create jobs. So. I want to make sure that we're talking about both. I think that for example. We could. Put a lot of people back to work right now. Rebuilding our roads and bridges. And this is deferred maintenance we know we're gonna have to -- and I want to bridge that connects Mitch McConnell state to John -- state and there was a rotten bridge and everybody knows. I'll bet they really want to steer -- improved. Well how we -- what's -- conversation about that will create jobs -- be good for businesses. Reduce commuter times improve commuter safety. That has to be part of this conversation not just. This constant argument about. Cutting him and spend. So so I guess my point is -- -- What I wanna try to do is to make sure that worked constantly focused are true north is on how are we helping American families succeed. Deficit reduction is part. Of that agenda and an important. But it's not be only. Park and I don't want us to be paralyzed on everything just because we disagree. On this one -- And as Larry said Jessica what I'm also hoping as is that. Over time perhaps after Republicans. Step back and you know maybe they can say you know what we -- tough on the sequester. This makes us feel good. Republican caucuses and a better move when they come back. Maybe then we can have a more serious discussion about what the real problems. Deficit and deficit reduction -- and -- the good thing about Americas is that. We sometimes we get through to these bottlenecks and we get stuck in. You have these sharp partisan fights but the American people pretty steadily are common sense and practical. And eventually that common sense. Practical approach. Wins out and I think that's what will happen here as well and in the meantime does -- to make the final point about sequester. We will get through this. This is not going to be a apocalypse -- -- some people was. It's just don't. As gonna hurt gonna hurt individual people is gonna hurt -- com -- overall but. If congress comes to its senses. A week from now a month from now. Three months from now. Then. There's a lot of open running room there for us to grow our economy much more quickly. And advance the agenda the American people. Dramatically. And so. You know I've this is -- area. This is -- temporary stop on what I believe is the long term. Outstanding. Prospect for America growth and and -- -- -- president wrapping up an unscheduled. Press conference this war and after meeting with. -- congressional leaders to talk about those looming 85 billion dollar cuts that are about to take effect at midnight tonight I want to bring -- ABC's political director Rick Klein Rick and -- get your thoughts on what the president just said there's a lot to get to. One of the things he said right out of the gates of the American people are strong and resilient. It almost seemed like a premonition of hears the sound of Robert meeting the road is in awarding of reality about what's gonna happen is an attempt to build public support behind the president. What was that statement about. The only strategy the White House has now it is now clear is the try to pressure Republicans to come back to -- negotiating table this is a remarkable statement about the limits of presidential power. We heard from the president that he's not a judge we heard that he's not a dictator. We know that he's not a -- after he cut that. It is Star Wars reference mixed up a little bit but what we do know is that he is eager to get something done but doesn't know how to do it he said I can't bring congress back -- -- keep them. Through the weekend I can't force them not to take off their planes so they're just gonna have to -- -- reality and it's going to take. Some harsh impact out in the real world but that put to start without pressure on Republicans they've shown no signs whatsoever. Of bending to the president's will so far something fundamental has the change in this big fight over budgets for the president to start to get as. -- it's difficult though to get to the fundamentals of it when it statements are coming -- the president just say that these are dumb. Arbitrary cuts. Regarding his 85 billion about to be laid out wedding. Blame squarely on congress is a public -- -- that kind of an argument or public just overall fed up with Washington. We haven't seen any signs so far that the public is engaged in this fight -- -- I think the dynamics have to shift these cuts have to be felt they have to be real people have to be worried. About getting their next paycheck they have to be worried. About school programs cutting and being cut off -- to be worried about longer lines at airports not be able to get meat and chicken because of it inspections that aren't happening. They need to feel -- and if they don't feel that Republicans are gonna feel empowered as the battle continues if they do feel it that's a change in the dynamics of the president can use to begin to exert his will on congress he does not getting anywhere it is just again -- -- remarkable statement of paralysis in government the president is right that he won the election. But he's also not in a position right now to do much about that. So -- that reality hits me that the White House has been pretty strong in its rhetoric as far as like she's trying to explain exactly what those kinds of realities would be with these cuts in place. Mayor Bloomberg as was addressed error brought up in that press conference this morning and I had -- in fact the sky is not falling that is not going to be a massive amount of layoffs. Has the White House walked back from the intensity of this rhetoric or they've been pretty consistent with that. They have walked it back I think you had you went cabinet secretary education secretary saying that there are literally. Lay -- notices thinks -- being out there with teachers they have backed off of that the president. Just said at the end it is his statement there that this is not the apocalypse and I think. You would seem to be something other than that although it. Of course we had a lot of different rhetoric coming from different agencies people saying -- -- war workplace deaths more forest fires nuclear waste sites that aren't being cleaned up but terrorist attacks that may not be thwarted because we're not. Yet his translating intercepts even so that sounded rather apocalyptic just a few days ago I think there's -- -- realization on the part of the administration they -- -- got a little too far out front on that and they have to dial it back because. Guess what the sun still rose today -- -- will tomorrow as well. Art well I wanna get your thoughts about what house speaker John Mayer said it -- right just moments after they had a meeting with the president's guy he addressed reporters just for a a very very brief moment take a listen. What made it clear at least the president got his -- place on January 1. Discussion about revenue. Five -- evolved. It's about to pick involve spending -- don't want it. So revenue no longer talking point for Republicans. -- they they indeed they really say over and over again we did have already the president got his big tax hike. At the end of the year with the fiscal Clinton of course the president is saying I need to go back -- -- close loopholes I need to. Make sure that the rich are paying their fair share earnings for the were taking away things for rich people before we hit four people this is the fundamental difference between the two approaches the Republicans saying we need to wall this on the spending side the president saying we used to a big chunk of this on the revenue on the taxing side so that is where that needed the -- really happens although -- what mention one other thing that speaker Boehner. -- a little bit of news also of that statement where he talked about passing it resolution next week to continue funding for the government. Beyond the end of march right now expires the into the marks the threat of a government -- the president seemed to indicate he would be willing to sign that even if the budget cuts. That are now going to be enshrined in the law at midnight tonight are part of that it that is actually -- is that we can leave today and being reasonably sure of the fact that there will not be that threat of a government shutdown at the end of this months. The machine we'll keep on going at least that's what it sounds like and he's very early formative stages. I ripped -- when he's with us about about something else the president had said and I'm -- -- -- in this but he essentially said that there are no that there are Republicans in congress who privately say that they would close. Loopholes. Now it was in a public outing for some of these Republicans but he did seem to to put some kind of a pressure on those that he may have been having private discussions with. If if revealing that in the public does that is that is an effective technique -- to kind of pressure them to either side with Democrats or at least open the doors of communication. I doubt it the silent caucus here's the catch they have to get up and vote at some point. Maybe this is a signal to some of those -- Republicans that they can go find each other. And team up on -- yes but. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- A lot to dig through we know that our political director -- -- will be doing all the hard work force Rick thank you so much I want to bring in now. Jeff MacKey from Yahoo! finance see how the markets have been reacting to this jets Good Friday after reports that which we're meeting on better terms -- how the DeVon seen us. Now we start off a little soft and then we kind of honor moto again and I think Wall Street's really gotten -- and Wall Street cynical to start. But now this is the third fourth lap we've taken on what is now called sequestration -- before an August of eleven it was the debt ceiling debate. I don't think much is going to happen I think is -- said wouldn't push this out it's not going to be an actual march 27 deadline. And so some of the industry is that you would see hits they automotive insurance or some of the medical companies. The stocks are not being hit because Wall Street doesn't think any of this is really going to come to pass. -- -- -- it's very surprising says -- houses that there might actually be some fatigue on Wall Street almost -- stuck with the government's doing. It's it's absolute exhaustion. You know what what other fiscal cliff and -- -- we talked about this at the time this is the second part of the fiscal cliff that was supposed to happen on January 1. Now we've pushed out from march 1 it only cry the sky is falling so many times before people to smack chicken little -- and get over. And that's what is happening here was very disheartening press conference in the sense that we're still in that name calling thing. We're still -- and lets you some examples about kids who read them children of military veterans who can't get education -- people about their medication. That's just not that is absolutely -- to paraphrase Thomas Jefferson we are all Republicans were all Democrats were all Americans not all these things are just the battle of who's a jerk who's who was slightly whiplash and who's the good guy. We gotta get some things done he's the president of the United States does in fact have the power to drive these things for -- Well I I want to avoid the politics of that just from all of this because they do what is stated of state the fact that the Dow the S&P are up near -- record levels. As a speaking to the resiliency of the markets in Maine 20072008. Demeanor and we've learned lessons from mountain. Despite what 20072008. Was very different we look into the abyss there it's not a political statement added it's a statement of small street is betting on gridlock gridlock to a degree is a good thing. But as long as the -- -- -- that way it's not a matter which way you vote we're just trying to handicap how this is gonna play out and as long as the rhetoric is me against you your bad guy on a good guy. Wall Street as far as they're concerned is going to bat on the idea that there's gridlock that we're gonna do just enough. -- get along during the crisis the financial crisis or 70 -- we do quite a few things just keep the whole system for breaking down. That's the scenario you get folks selling stocks right now it's business as usual you may not like that business -- -- it's not gonna hold stocks back. How is that out -- -- -- -- we -- the big board just to see where it's trading and asks. We'll get to just moments there yeah straight up while policy points. You know -- -- Garcia -- -- -- is not a huge move they tried to take it down earlier today and you can picture of you -- ask for more -- the market. In arbitrators panel looking at each other and are you gonna -- -- he -- himself. They took it down about a 115 point something like -- and -- -- realized this wasn't going to be a flight of the accidents this was just another chance to take I've made daybreak capital want to watch the president John Boehner talk. And move on with your day -- the fundamentals are not that -- the sequestration can't bring a halt to the economy and so we're still left. With a slow growth not so bad no great shakes the better poking out -- big sharp stick tight financial situation that's good enough for stocks at least for the moment. All right stick analogy always putting his perspective Jeff met Netanyahu finance sites -- appreciate that want to -- in Austin Goolsbee. Acute shortage ABC news this week also -- economics at the -- -- Chicago's Booth school of business. Cost of actually witnessed today you are -- were part of the administration as president Obama's chief economic advisor. Listen to what the president said knowing him as you do what is happening behind closed doors at the White House right now. Well you know I think. They -- it seems to me. -- Will be better. Summer -- east. -- and how. Basically only which we are the American people. Are what -- -- -- -- -- -- So -- All. I'm so glad that -- brought out those two words American people because I think often times with forget that there is the -- grow up -- this and that -- how is it going to affect. Everyone on an everyday basis -- you've been one of the few economists who have been saying that the sequester will in fact. Have a big impact the president obviously we just heard saying himself that layoffs could happen. Walk me through this reasoning for this because there is a good deal of people that think that in fact that is not the reality. Yeah wasn't prohibited due to trumpeting. What I don't hate. To -- -- -- required. To make it -- what you. Eat an apple 10. All -- And -- is that how -- his rhetoric we're sort of -- -- -- -- or. How. Slowly -- going slow. So that's why do it -- -- and others. -- work. -- senate will. I don't know. You better be begin. People. We -- is. -- You. -- -- -- So we've heard that these cuts are set to take effect. Over a period of time over the next ten months all the effects will not be felt immediately. I want to get your opinion and and and your thoughts on the fact that if you do you have this kind of say slow bleed if you will what is the larger impact on the economy as opposed to immediate cuts taking effect. Across the board. Yeah it is important to make six. Immediate. Or 00 -- you know what do you do it. Urged. And bigger impact on -- order all. Oh don't say they are defense spending. -- -- -- -- -- -- -- Elements these little opportunity to keep -- just be. I think it's spaced out. So what to order back US NL BEO. The -- the trickle down effects obviously starting from those larger -- Contracts -- -- is there any specific cuts in this sequester that is being overlooked. Well I don't know to -- is probably not be overlooked and lead oh how. I. Want. -- -- -- -- People. Could be -- -- -- The lions are backing up at her work sit -- -- law. Might -- -- As an economist -- obviously YouTube if you look at the facts and you look at the numbers and when they don't line up it's very easy to -- -- say now this isn't jiving. But I wanted to ask you about the rhetoric from the president and the White House in the past couple of weeks has -- been in line. With the seriousness of the sequester. You know I don't. Let's say he went out. Weeks. What does Google based in OB. Album noticeable. -- peoples are very upset. The -- -- the year -- Security. You are seeing a lot of states -- her. -- -- at all is as. Then I think. It rhetoric -- -- -- -- It is well he will. Go. Near you. That IP. Probably nothing -- happen you know this. -- forwards in the next budget fight which is gonna be into arch. Whether they pass T he resolution. -- On -- middle income family in say Iowa. In my -- -- -- effect next week I go to the grocery store or is this is as an impact -- -- -- be months down the road or -- start immediately seen a few things while they may not be drastic but I'm gonna start seeing a few changes. You might see your future is you know especially if your goal order -- -- If you're -- is -- categories. Low strict respect. Yet. You -- you're using at a university. -- -- I don't you have or -- -- science only. You know. -- I think overall. Line. This -- where really any body. Or are. You or you're. Right -- not your. Austan Goolsbee professor of economics at the university of Chicago's Booth school of business Austin thank you so much for your insight this afternoon -- Of course again as we said just hours away from those 85 billion dollars in spending cuts -- -- begin taking effect at midnight tonight we'll have a complete report and a recap on abcnews.com. For now.
This transcript has been automatically generated and may not be 100% accurate.